2023-06-20 21:00:00
The US stock market continued to fall on the 20th. The US Federal Reserve Board (FRB) chairman Powell’s testimony to Congress on the 21st was a nervous development.
S&P 500 Index 4388.71-20.88-0.47% Dow Jones Industrial Average 34053.87-245.25-0.72% Nasdaq Composite Index 13667.29-22.28-0.16%
The S&P 500 index fell for the first time in four weeks, leaving its recent 14-month high. The Nasdaq 100 index, which is dominated by large tech stocks, was little changed. Tesla’s solid performance supported the index. Nike is cheap because of inventory concerns. Meanwhile, PayPal Holdings rose. The two companies have reached an agreement for private equity firm KKR to acquire the company’s loan receivables.
Artificial intelligence (AI) frenzy has contributed much to the recent rally in stocks and is sure to be the topic of the company’s second-quarter earnings conference call. “The question is how much of that translates into earnings,” Scott Cronert, a global markets strategist at Citigroup, told Bloomberg Television. “We are going to end up in a situation where there is a disconnect between the market that has gone up a lot and the earnings outlook,” he said.
The trajectory of U.S. monetary policy is also an element of uncertainty. Powell will testify before Congress on the semiannual monetary policy report on the 21st.
“We are skeptical about the sustainability of market-cap-weighted U.S. stock index gains,” said Lisa Charlett, chief investment officer at Morgan Stanley Wealth Management. That’s largely because investors continue to think they’re just threatening to keep it in place for the long term,” the report said.
“A desired soft landing would remove the incentive for the Fed to cut rates, especially if the labor market is still relatively resilient,” he said. “The ‘Goldilocks’ scenario is at risk. Real interest rates. We should be wary of , which is likely to edge higher on the back of the economy’s soft landing.”
US Treasuries
U.S. Treasuries rise. Falling stock prices and oil prices supported government bonds. Earlier in the morning, yields briefly rose as U.S. housing starts surged to their biggest jump since 2016.
U.S. Housing Starts Grow Fastest Since 2016, Exceeds All Market Expectations (1)
JGB latest price vs. previous business day (bp) rate of change US 30-year bond yield 3.81%-3.9-1.01% US 10-year bond yield 3.72%-4.1-1.08% US 2-year bond yield 4.68%-2.9-0.62% East US time 16:55
foreign exchange
In the foreign exchange market, the dollar index continued to rise for three business days ahead of Chairman Powell’s congressional testimony on the 21st. Meanwhile, the Australian dollar fell. Falling global commodity prices weighed on the stock. The sell-off also came after the Reserve Bank of Australia (RBA) minutes said June’s rate hike decision was the result of “a delicate balance” debate.
Yen rises. Against the dollar, the exchange rate was temporarily set at 141.21 yen per dollar. Finance Minister Shunichi Suzuki said at a post-cabinet press conference on Thursday that he was “monitoring currency movements.” “We will continue to communicate closely with currency authorities in other countries, including the United States, and take appropriate measures if necessary,” he said, referring to the US foreign exchange report. Yasutoshi Nishimura, Minister of Economy, Trade and Industry, also said at a post-cabinet press conference on the same day, “We must keep a close watch on excessive fluctuations or speculative movements.”
Foreign exchange policy “appropriate response if necessary”, close communication with other countries – Finance Minister (2)
Bloomberg Dollar Index 1226.231.710.14% USD/JPY ¥141.45-¥0.53-0.37% EUR/USD$1.0917-$0.04-0.04% 16:55 US Eastern Time
Barclays analysts Themisto Chris Fiotakis and Shinichiro Kadota said in a report, “If the Bank of Japan changes or removes yield curve control (YCC), we expect the yen to jump 3-5%.” indicate. The yen is expected to rise to 137 yen against the dollar in the third quarter from July to September. On the other hand, he said the speed and extent of the yen’s depreciation would be limited by the risk of foreign exchange intervention.
crude
New York crude oil futures fell. Overall risk aversion has strengthened.
Chinese banks lowered their benchmark lending rates on the 20th, but with the introduction of comprehensive economic stimulus measures remaining at a gradual pace, how far the Chinese authorities are willing to boost the economy Market relations causing controversy among people.
“With one less trading day after the holidays, this could be a tough week for oil prices,” said Ed Moya, senior market analyst at Oanda. He said there were signs that China’s economic recovery was stalling due to underpowered stimulus, and that risk aversion appeared to be growing again.
On the New York Mercantile Exchange (NYMEX), the West Texas Intermediate (WTI) futures July contract ended at $70.50 a barrel on the last day of trading. The settlement price was not calculated the day before because it was a public holiday of Emancipation Day. The August contract closed at 71.19 barrels, down $0.74. London ICE North Sea Brent August delivery fell 19 cents, or 0.3%, to close at $75.90.
Money
New York gold prices fell. While European and American stocks were sold, the gold spot price broke below the support line of the 100-day moving average, accelerating the decline.
Today’s decline clearly broke gold’s price from the range it had been in for most of June. Since last week’s meeting of the Federal Open Market Committee (FOMC) and the European Central Bank (ECB) policy committee, speculation of further interest rate hikes by the two central banks has weighed on gold prices.
Gold spot prices were down 0.7% from the previous trading day to $1,937.78 an ounce as of 2:25 pm New York time. Gold futures for August delivery on the New York Mercantile Exchange (COMEX) fell $23.50, or 1.2%, to close at $1,947.70 an ounce.
Original title:Stocks Slip as Investors Worry If Rally Has Legs: Markets Wrap(excerpt)
Treasuries See Early Gains, Hold Advance With Stocks, Oil Lower（抜粋）
Dollar Extends 3-Day Gains; Aussie Lags, Yen Jumps: Inside G-10（抜粋）
Barclays Sees USD/JPY at 137 by 3Q, Better Environment for Yen (excerpt)
Oil Falls Below $76 as Risk-Off Mood Outweighs China Stimulus(excerpt)
Gold Slips as Technical Support Gives Way Amid Drop in Stocks（抜粋）
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